In the first full budget of Modi 3.0, presented on February 1, 2025, Finance Minister Nirmala Sitharaman has announced a significant policy shift in India’s nuclear energy sector. The budget outlined key initiatives:
Legal Reforms
Plans to amend the Civil Liability for Nuclear Damage Act (CLNDA), 2010, and the Atomic Energy Act (AEA), 1962, to encourage private sector participation in nuclear energy.
Nuclear Energy Mission
A Rs 20,000 crore initiative for the research and development of Small Modular Reactors (SMRs), with at least five indigenously developed SMRs set to be operational by 2033.
Apart from these, India has set a target of generating 100 GW of nuclear energy by 2047 to support India’s energy transition efforts.
Following the significant announcement in the Union Budget, Prime Minister Modi’s visit to France was equally pivotal, as India and France inked on a Declaration of Intent to establish a partnership focused on advanced modular reactors and small modular reactors.
Indo-French Collaboration On Nuclear Technology
French President Emmanuel Macron and India’s Prime Minister Narendra Modi have agreed a Declaration of Intent for establishing a partnership on advanced modular reactors and small modular reactors after talks in France. They also visited the multinational ITER nuclear fusion project last week.
India’s Department of Atomic Energy has partnered with France’s Commissariat à l’Energie Atomique et aux Energies Alternatives (CEA) for collaboration in nuclear energy research and development. The agreement includes cooperation with the Global Centre for Nuclear Energy Partnership in Haryana, India, which aims to promote international collaboration in nuclear research and capacity-building. Additionally, the partnership extends to the Institute for Nuclear Science and Technology in France, further strengthening ties between the two countries in advancing nuclear technology.
What Are SMRs?
SMRs typically have a smaller capacity than conventional nuclear reactors and can be manufactured in factories and installed elsewhere. This class of reactors, which can have as much as 300 MW of generating capacity, can be assembled in locations where it’s not feasible to construct larger nuclear facilities. India plans to have at least five SMRs by 2033.
France and India have revealed plans to join forces in developing advanced modular nuclear reactors and small modular reactors (SMRs). This exciting collaboration comes on the heels of India’s recent budget proposals, which aim to reform the country’s nuclear energy laws and set ambitious growth targets. Together, these moves signal a clear push to involve the private sector more actively in India’s nuclear energy future.
Civil Liability for Nuclear Damage Act (CLNDA)
The current version of the Civil Liability for Nuclear Damage Act (CLNDA) has discouraged private companies from investing in India’s nuclear sector, mainly because of concerns over supplier liability in case of a nuclear accident. Under Section 17(b) of the CLNDA, operators are allowed to seek compensation from suppliers or their employees if an incident occurs due to defective equipment or subpar services. Various reports suggest that this provision has been a significant barrier for American and French companies, which have been reluctant to invest in India’s civil nuclear program due to these potential liabilities.
India’s nuclear liability law, the CLNDA, has been complex and unclear since its inception, and the Modi government did not make significant changes to simplify it during its first two terms in power. Under the law, the operator (in India’s case, the public-sector Nuclear Power Corporation of India Limited) is held liable, with a capped liability of Rs 1,500 crore. However, this raises the question of what happens if the cost of a nuclear accident exceeds this amount.
